4 Metrics Restaurant Managers Need to Monitor for Success

The restaurant industry sees an average of $1.9 billion in sales every 24 hours. Your business is making money, and it’s also spending cash to stay in operation – do you know how the numbers add up? Technological solutions, such as a restaurant guest manager, can help you keep track of metrics that provide insight into your business’ performance as a whole.

Here are four metrics you can monitor for success, as a restaurant manager.

1. Break-Even Point

Your break-even point is the point at which your sales exactly cover your expenses. By knowing your break-even point, you’ll have a better idea of whether what the prices at your restaurant are sufficient to cover your ongoing expenses. You’ll also have a greater understanding of how each product contributes to your bottom line.

To calculate your break-even point, you can use the following formula:

2. Food Costs

Food costs can have a large impact on the amount of money you spend every month. For example, inexperienced chefs may use too many ingredients in the kitchen, stretching your budget unnecessarily.

You can keep an eye on food costs and your overall inventory with an updated POS system. Today’s platforms connect the back of the house with the front to give you a more complete view of your operations. In the event that you spot food cost issues, you can spend more time on training your employees to position them for success.

3. Gross Profit

Your gross profit can give you an idea of how profitable your restaurant is as a whole. It’s also one of the first indicators of whether you’re spending efficiently, by accounting for everything from labor to restaurant supplies. Your gross profit is calculated by subtracting the cost of sales from your sales revenue.

Keep in mind that because the cost of sales may vary over time, your gross profit will vary as well. For this reason, you should calculate it routinely and take other factors into account, such as changing wages and supply costs.

4. Seating

One study previously found that patrons seated in booths have a higher average of spending-per-minute (SPM) than those seated elsewhere. However, people seated at “poor” locations in restaurants also have high SPM, so which tables are best?

A restaurant guest manager can help you keep track of your customers’ likes, dislikes, and spending habits. You can also look at trends over time to see how much people spend when they are seated in certain areas of your restaurant, providing insights into how seating really factors into your overall bottom line.

Final Thoughts

About 42% of restaurant owners start their business from scratch. If you’re one of them, you may not know all of the key metrics associated with running a business in the industry. Taking these four key performance indicators into account can give you a place to start as you begin to assess your success.